Ghana Going Forward

In an exclusive interview with The Network Journal, His Excellency John Dramani Mahama, vice president of Ghana, addresses why his country attracts African descendants; outlines policies, laws and programs that will govern its oil and gas industry; and affirms its commitment to protecting the environment.

TNJ: Ghana appears to be attracting large numbers of African descendants from the United States as residents, investors and tourists. To what do you attribute this attraction and how is Ghana benefiting from it?H.E. Mahama: Ghana has always attracted visitors and residents from across the globe, particularly those of African descent. Ghana has shown itself to be a trailblazer on the African continent. We pioneered the struggle for independence in sub-Saharan Africa, and that endeared Ghana to many people in countries all around the world who were actively engaged in struggles for their independence or civil rights, including people in the United States. Our first president, Dr. Kwame Nkrumah, was a leading Pan-Africanist who truly promoted the idea of unity amongst all people of African descent, and welcomed individuals like George Padmore, W.E.B. Du Bois and Maya Angelou to Ghana to help with the work of nation-building. So Ghana became a source of pride and inspiration to the world, and lately we’ve been witnessing a return of that energy and sentiment. With numerous peaceful transitions of power, political stability, a vibrant media, and the rule of law, Ghana is currently pioneering the democratic process in Africa. And, of course, our Black Stars are also doing their part by creating sparks on the football pitch!

During the 1980s and 1990s, which in Africa are often referred to as the “lost decades,” Ghana, like most other developing nations, experienced a “brain drain.” Due to economic hardships and a constantly shifting political landscape, we lost a lot of our brightest minds to the West. What we’re seeing now, with a steadily increasing repatriation rate, is a reversal of that “brain drain.” The benefits of this are evident; with the additional skills, experience and motivation, the country’s macroeconomic situation has improved tremendously, growth is strong and high, inflation is coming down; and the cedi, our currency, has been stable against its major trading currencies for some time now. Ultimately, all of this makes Ghana more attractive to investors.

TNJ: Has Ghana’s entry into the petrochemical industry altered its policies on alternative and renewable energy? H.E. Mahama: No, Ghana has not altered its policies on alternative and renewable energy. We believe that despite the recent oil and gas discovery we still need to develop our renewable energy resource because fossil fuels are a finite source of energy. We are also especially mindful of the need to protect the integrity of the environment. The recent oil finds, rather, provide a stronger basis for policy on renewable energy in order to mitigate the negative impact of the carbon monoxide emissions resulting from the activities of the petroleum industries. Consequently, a Renewable Energy Bill, which is aimed at increasing the contribution of renewable energy to 10 percent in the national energy mix, excluding large hydro and wood fuels, is currently under discussion and is expected to pass into law before the end of this calendar year.

TNJ: Why do you believe that 90 percent “local content and participation” in the oil and gas industry by 2020 is attainable?H.E. Mahama: Let me first emphasize that this is a policy target and not a law. The Ministry of Energy, in collaboration with the Ministry of Trade, has already completed a draft policy for consideration by Cabinet that seeks to establish an office for the promotion of “small and medium-scale enterprises.” The focus of this office will be to assist local companies by providing them with financing, other resources for capacity building and support services so that they may be able to fully engage in the oil industry. I believe and will continue to maintain that 90 percent “local content and participation” is definitely attainable, with the requisite commitment to the policy, of course. There is a wealth of talent, intelligence and experience in Ghana. We already have a good baseline of expertise, comprised of resident Ghanaians as well as those in the Diaspora, and experts at the Ghana National Petroleum Corporation (GNPC) who effectively handled the industry before the commercial discovery of oil. The industry is not made up of only petroleum engineers. There is a myriad of expertise — mechanical and electrical engineers, accountants, etc. These professionals have handled our local economy for years quite adequately. The next step would be to customize their skills to meet the requirements of the oil and gas industry. I believe the way forward for Ghana, and for all of Africa, is to reinvest in ourselves and in our future by fostering and then utilizing the talents and skills of our own people. TNJ: How do you ensure that the companies registering for local content participation are not fronts for wholly owned foreign entities, but are indeed wholly owned local entities or partnerships in which locals have a majority stake?H.E. Mahama: Government has already placed the “Petroleum Exploration and Production Bill” before Parliament for passage. This bill introduces the initial framework that will regulate the petroleum sector. After the bill has been passed, a subsidiary legislative instrument to regulate the local entities will follow. That local content bill will regulate and protect local entities and will firmly address the issue of the fronting of foreign companies in Ghana. Beyond the basic requirement of a company being incorporated in Ghana, the GNPC will also look critically at other telling items in a company’s profile: who the actual owner is and where she or he is from; the percentage of Ghanaians in management; the percentage of Ghanaians in technical positions; the percentage of Ghanaians in the total labor force; and the human resource development plan of the company.

TNJ: What percentage of local-content firms are getting involved in manufacturing and what percent are getting involved in the services aspect of the industry?H.E. Mahama: The GNPC is still gathering data so we will, in due course, have more precise numbers. That said, I believe there are more companies getting involved in the industry through the service aspect. It’s fair to assume that initially, a greater percentage of the local-content companies will be involved in the services aspect because it is currently the most immediately accessible entry point into the industry. However, that will change. Through the programs and policies I mentioned earlier, we will gradually build capacity to enhance the manufacturing aspect, thereby increasing that percentage. It’s a step-by-step process.

TNJ: Why did Ghana decide to develop its gas resources first? How will this affect the growth of downstream industries?H.E. Mahama: We felt that is what made the most sense as it has the potential to grow the economy at a reasonably measured and sustainable rate. It is also the route we felt was the most environmentally sound. With gas, we can produce a relatively cheaper and more reliable supply of electricity. This alone is significant because electricity is a key economic driver. With a consistent and less expensive source of electricity, all industries would be up and running — schools, hospitals, private businesses and social facilities — and that alone would increase productivity and boost the economy.

The gas component will also lead the country into several petrochemical industries that would generate numerous other employment and growth possibilities. Additionally, gas can also drive the development of the alumina industry from Ghana’s abundant bauxite reserve. Last, but certainly not least, with gas we can manufacture our own fertilizer, which could potentially revolutionize our agricultural sector. With more than 55 percent of our population engaged in the agricultural sector, the possibilities for growth in that field are enormous.

TNJ: Is Ghana involved in Africa’s Green Belt project? H.E. Mahama: Currently, Ghana is not involved in the Green Belt project, but not for lack of desire. This administration is very conscious of environmental issues and responsibilities, and we are looking forward to participating in the Green Belt project in the not-too-distant future. I believe it’s important to show solidarity and to work in cooperation with other nations, especially on an issue as important as our environment, so we have recently joined forces with the U.S.-based Plastic Pollution Coalition and are also working informally with other international Green organizations. Just as, if not more, important is to institute policies and practices on a local level that will impact a population’s day-to-day relationship with its environment. Ghana, on its own, has taken steps to protect our forest areas, wetlands and to safeguard certain Green zones within our cities. In an earlier question, you asked what it is that attracts large numbers of African descendants to Ghana. The forward-thinking politics of the country and the persevering spirit of our people, as I mentioned, should be at the top of any list of reasons. Then there is also the beauty of the land. People come to Ghana because it is a beautiful country. From the savannah to the rainforest to the mountains and coastline, it is paradise; and we are committed to making sure it remains so for our children and for those who are not yet born.